Former watchdog expresses concern pensions have become ‘political football’

Paul Kenny raises questions about Sinn Féin proposals for changing pensions regime

The former pensions ombudsman has expressed concern that pensions have become a “political football” rather than the subject of a “rational and reasoned debate”.

Paul Kenny made the remarks as he also raised questions about proposals put forward by Sinn Féin for how it would change Ireland's pension regime, arguing that some of them were "short-sighted".

Competing promises on the State pension regime was a key feature of last year’s general election campaign.

Sinn Féin undercut the other parties with their pledge to lower the qualification age to 65, from the current age of 66.


The Coalition deferred the planned rise of the pension age to 67 – which was due to happen this year – while a Pensions Commission considered the issue.

The commission’s report is yet to be published, but it is understood to recommend that the qualification age would not begin to increase to 67 until 2028.

Sinn Féin is insisting the age should return to 65, at an estimated annual cost of €127 million, and its finance spokesman Pearse Doherty has set out a number of ways the party would pay for this.

Employer PRSI

He said Sinn Féin would raise employers’ PRSI on the portion of income above €100,000 by more than 4 per cent over a number of budgets. He argued that even a 2 per cent increase would bring in €118 million.

Sinn Féin want to lower the salary ceiling for private pensions to €60,000, from the current threshold of €115,000, which it says would bring in €187 million.

The party also wants to reduce the size of the pension pot a person can accumulate while continuing to get tax reliefs from €2 million to €1.5 million. It believes this would return €200 million to the exchequer.

Mr Kenny, who served as pensions ombudsman between 2003 and 2016, argued that there is “no coherent thinking in Sinn Féin regarding private pensions”.

He raised questions about its plans to limit the tax relief available for higher earners with larger pensions, noting the current €115,000-salary ceiling for tax relief is “already well below the sort of earnings we see in the higher echelons of both the private and public sectors”.

Public sector

He said those in the public sector “don’t have the right to opt out of contributing to their superannuation arrangements, so any proposal to lower the ceiling would be a massive disincentive to them”.

Mr Kenny said public sector workers could be discouraged from seeking promotions due to the potential impact on their pensions.

He suggested the proposal on reducing the size of the pension pot a person can accumulate while continuing to get tax reliefs to €1.5 million is “short-sighted”, and would also have a disincentive effect.

Mr Kenny also argued that Sinn Féin is not taking into account the large contribution that pensioners already make to the exchequer.

He cited how pensions, including the State pension, are subject to income tax and occupational pensions are subject to universal social charge.

Cormac McQuinn

Cormac McQuinn

Cormac McQuinn is a Political Correspondent at The Irish Times